On today's show, we discuss the House passing a landmark legislation that could help solve the housing affordability crisis. We also discuss the impact this legislation could have on the economy and the future of the housing market. And of course, we have our Hot Takes.
00:00:30.000The big passing that the bill that they talked about yesterday, House approves major housing affordability bill, sending bipartisan measure to Trump.
00:00:38.620This is important for a lot of people that are sitting there saying, how can I control housing?
00:00:42.800They're trying to do that in a different way. But let me read it to you.
00:00:46.260The House on Tuesday passed a landmark housing affordability bill marking a raid bipartisan legislative accomplishment as lawmakers seek to address rising costs ahead of midterm election.
00:00:56.620Tim Scott, Republican, Elizabeth Warren, Democrat, maybe progressive socialist,
00:01:02.280House GOP leaders fast-tracked the legislation after the Senate approved it
00:01:06.040with overwhelming support to pass the House in a 358 to 32 vote.
00:01:12.780And now heads to President Trump to sign.
00:01:14.480By the way, some of the House that didn't vote against it, that voted against it,
00:02:16.600When you're doing billions on top of billions, 350 is nothing.
00:02:20.000Some of these guys got tens of thousands that they're dealing with.
00:02:24.820Lawmakers designed this cap to explicitly curb corporate competition in suburban markets.
00:02:30.740Wild housing advocates argue has artificially inflated home values and squeezed that middle class families during the ongoing cost of living crisis.
00:02:40.200California, New York has the lowest percentage of homeownership.
00:04:34.020So part of this bill that I wasn't sure about was the limit on corporate purchase
00:04:41.620Because whenever you give the government a knob, they kind of turn it, and they'll always turn it the wrong way.
00:04:46.460So I think that's a well-intended thing to say, hey, the supply of housing is being constrained because they can buy so many houses at once.
00:04:53.620And then when they price the rent on those houses, they're able to price the rent higher because they themselves, through the purchase of those houses, have now constricted who controls the supply.
00:05:04.220So I agree that that hurts the little guy.
00:05:09.940The rest of the bill has got some things I think are going in the right direction, but we really need the states to do it, such as manufactured homes relief.
00:05:18.240There are some standards for manufactured homes that they've changed to match the market.
00:05:22.420And then financing on – they want the FHA to increase limits on multifamily to match the market.
00:05:31.020And so if the FHA, you know, sits there and just says, well, you know, the average American is 141 pounds, and that's the average from 1930, that's not the average today.
00:05:42.140So over time, you know what I mean, Pat, that average goes up.
00:05:44.780Same thing happened to the FHA with the limits on mortgages.
00:05:47.680Hey, well, the limit that we will back and everything is here.
00:05:51.460What I also want to see is keep the inspection requirements on the builders so that Toll Brothers and Lanier can't build a bunch of really cheap, bad houses.
00:06:02.660Keep the inspection requirements on the builders, but lower the permitting time so that they can find tracts of land and they can actually build.
00:06:10.980That will build the supply and be able to do it.
00:06:13.460But additionally, where you have like downtown Dallas that we saw or areas where warehouses went down and townhouses and condos went up, now people could afford a townhouse or a condo in downtown Dallas and actually work there as a 30-year-old person.
00:06:28.880So I think more needs to be happening on the supply, but I think the FHA part of this, inspection efficiencies, what they did for manufactured homes, is good.
00:06:40.080But I don't want the government to have a long-term knob over who can buy what.
00:08:58.700I think there needs to be an incentive for the people to build three twos instead of four threes, maybe even two twos, you know, that they're building.
00:09:05.780And then the other part when you look at this, which is a concern, is the following.
00:09:08.480In 1970, do you know the average income, average median household income was $9,900?
00:09:15.380Let me give you the exact number so you have it.
00:09:17.620The average, the median household income was $9,900.
00:09:23.160The median home price was $23,000, that's 2.3 times.
00:09:43.520Do you know in some markets like Miami, L.A., New York,
00:09:46.300that number is 7 to 13 times your salary.
00:09:49.480How in the hell are they supposed to do that?1.00
00:09:52.500So if the incentive opens up and you're building something I can afford, I'd like to see the Black Rocks go into that.0.54
00:10:01.020But if you're going and picking up everything and then you're making rent control to these five corporations that now own it almost, it becomes like a oligopoly.
00:10:08.620Oligopoly, you know, by five, like centralized.
00:10:11.540That's a challenge for the average individual.
00:12:44.980If housing is a long-term investable asset, which it is because it's real estate and it's scarce, then you have to do one of two things.
00:12:52.740Keep building rings of the wheel farther and farther from the center of the old city and move businesses further and further from the center of the old city so the jobs are out there.
00:13:01.920So I don't have to live in Lancaster, Palmdale and drive an hour and a half to Burbank because I work in the motion picture.
00:14:12.180And that's where people would live in Encino and go work in Burbank.
00:14:15.040Their children now are out here in Palmdale driving all the way into Burbank and Glendale where there's a lot of jobs, especially in media and entertainment.